Chainlink (LINK) is making waves with a groundbreaking initiative aimed at redefining the way corporate actions are processed. This new venture involves collaboration with 24 of the most influential entities in the financial sector, combining expertise from multiple industries.
Unveiled recently, this partnership seeks to harness Chainlink’s innovative oracle technology, along with sophisticated blockchain and artificial intelligence (AI) systems, to make the corporate actions processing system more efficient and cost-effective.
Revolutionizing Financial Processes with Chainlink
As detailed in an recent announcement, Chainlink’s state-of-the-art solution will enable financial firms to access structured, validated corporate actions data in various languages swiftly and accurately. This reduction in processing time—from several days to mere minutes—is set to transform the landscape of financial operations.
By alleviating bottlenecks and enhancing data accuracy, this innovation is projected to save the global financial community an astonishing amount each year, addressing significant challenges such as:
- Mitigating processing delays
- Minimizing settlement inaccuracies
- Accelerating reconciliation efforts
- Lowering operational hazards for institutions
Key stakeholders participating in this initiative include renown financial market infrastructure services like SWIFT, The Depository Trust & Clearing Corporation (DTCC), Euroclear, and SIX, along with prominent banks and asset management firms such as UBS, DBS Bank, and BNP Paribas.
This sector currently faces staggering costs, estimated at around $58 billion annually, escalating at a rate of 10% each year, revealing a pressing need for improvement in processing methods, which remains below 40% automation.
Citi’s latest study underscores that each corporate action event typically consists of over 110,000 firm interactions, incurring around $34 million in processing costs—a reflection of the heavy reliance on manual data checks by many market participants.
Envisioning the Future of Corporate Actions
The initial phase of the initiative saw Chainlink team up with SWIFT, Euroclear, and various financial institutions to demonstrate how large language models (LLMs), including AI models from OpenAI and Google, could effectively parse structured data from unstructured corporate document releases.
Following this, the second phase introduced enhancements that improved the speed and efficiency of accessing corporate actions data. Utilizing the Chainlink Runtime Environment (CRE), multiple AI outputs were validated and converted into ISO 20022 messages, fully integrated into the SWIFT Network.
Moreover, the implementation of Chainlink’s Cross-Chain Interoperability Protocol (CCIP) facilitated the seamless sharing of these records across both DTCC’s blockchain and numerous public and private blockchain systems.
This initiative not only achieved remarkable data consensus among evaluated AI models but also showcased its capacity for multilingual data processing, effectively handling disclosures in diverse languages such as Spanish and Chinese.
Going forward, the project aims to accommodate increasingly complex corporate actions, including stock splits, while broadening its coverage to incorporate various jurisdictions and currencies. Additionally, there will be a focus on enhancing privacy and governance mechanisms to cater to the operational and compliance standards of financial institutions globally.
Sergey Nazarov, Co-Founder of Chainlink, remarked:
This is a major leap forward in addressing the challenges associated with corporate action data validation through AI Oracle Networks, proving that decentralized consensus among multiple AIs can effectively manage critical information.
Featured image by DALL-E, chart sourced from TradingView.com
